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if you sign a lease under a corporation name and also sign as guarantor under your own name can a landlord keep you as guarantor if you sell the business and change officials in the corporation if you don't want to?

Asked on 8/12/10, 5:19 pm

3 Answers from Attorneys

NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney's individualized advice for you. By reading the "Response" to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then stop right here, and do not read any further.

A landlord is not required to agree to allow you to assign a lease agreement and can set any requirements he/she desires in order to accept an assignment to a third party. Generally, the original lease will state that the lease is or is not assignable and even if it is, the assignor(s) who is/are the party selling the business and asking the landlord to accept a new tenant shall remain liable for the balance of the lease. If you originally personally guaranteed the lease, the chances are very good that the landlord will require that the guarantee remain in full force and effect even after the transfer. Sometimes the landlords will waive this clause or requirement if the new tenant is financially sound or agrees to provide an substantial deposit.

Any attorney will say whatever changes occur in the corporation (officers, selling the business, etc.) have nothing to do with your personal liability under the lease. You are still liable. Consult with an attorney in your area for specifics.